The Public Accounts Committee (PAC) is calling upon HMRC to ‘fully investigate’ Google over the payments it makes to the UK state as corporation tax. The call arises out of criticism that after generating £11.5bn in revenue between 2006 and 2011 Google paid only £10m in UK corporation tax for the same period.
Put simply it is being alleged Google, as a cross-border multinational, has the ability to move profits from country to country regardless of where those profits were made to drive down its tax liability. The PAC is critical of this and HMRC is to investigate.
However, it is not being said that Google has evaded any tax legislation and in my view has simply taken sensible tax advice to determine how best to deal with its liabilities for tax. Upon receipt of that advice or internal considerations it has acted to its best interests and then paid the relevant tax due. It seems to me that fault lies with HMRC who ought to identify these types of matters and draft legislation that deals with them proactively rather than retrospectively.
Whilst it would benefit me as a UK citizen for multinationals to pay more UK corporate tax, I cannot help feeling Google is being criticised for being sensible with its financial position, abiding by the relevant legislation for the countries within which it operates and calls for it to take a moral stance and pay more fly in the face of being a made for profit company.
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